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Ethena Labs pledged to publish monthly reports detailing custody and reserve information to improve transparency around its $USDe stablecoin.
Synthetic dollar issuer Ethena Labs released three custodian attestations for assets backing its $2.67 billion-strong $USDe token hedged by crypto-denominated currencies including Bitcoin ($BTC) and Ether (ETH).
According to the defi startup, Ethena’s stablecoin holds $1.31 billion and $1.33 billion of its stablecoin reserves with Swiss firm Copper Markets AG and CH Europe Digital Solution (CEFFU) respectively. Cobo Global HK Limited manages the remainder of $USDe’s assets worth $5.52 million. Ethena Labs also boasts a $42.3 reserve fund for emergency purposes.
The triple attestation shared on May 27 claimed $USDe boasted a 101.74% backing rate, meaning the asset was over-collateralized and could accommodate redemptions if every user chose to liquidate, per the issuer.
Addressing Ethena $USDe concerns
Ethena’s post responds to community feedback after $USDe’s mainnet launch in February. Following its debut of governance token ENA, and onboarding $BTC as a hedge asset, many in the community grew concerned about a possible systemic failure reminiscent of the 2022 crashes.
One of the prominent voices with doubts was Fantom developer Andre Cronje. As crypto.news reported, Cronje drew parallels between $USDe, and TerraUSD (UST), an algorithm stablecoin designed by Do Kwon’s Terraform Labs.
At its peak, UST commanded an $18 billion market cap. But when the token crashed, it triggered a $60 billion implosion across the Terra ecosystem and kickstarted a bankruptcy domino through the crypto landscape.
Despite industry skepticism, $USDe has garnered user demand and has a market cap of nearly $3 billion per DefiLlama. Also, the protocol added more cryptocurrencies to its reserves and tied partnerships with liquidity pool providers like Frax Finance.